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China visit boosts UK investment hopes

Tuesday, Jun 17, 2014 - 02:25

June 17 - Britain rolls out the red carpet for a visit by Chinese premier Li Keqiang - with hopes high for Chinese investment in infrastructure projects ranging from nuclear power to high-speed rail. David Pollard reports.

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A simple handshake and a few words from the British monarch. All it takes to confirm that China's Li Keqiang is VIP. The premier is in Britain on a visit both sides hope will mend fences. David Cameron met the Dalai Lama in 2012 - relations got even bumpier after a British report criticised China's human rights record. Now, says the UK prime minister, the two countries can look to prosper together. SOUNDBITE (English) DAVID CAMERON, BRITISH PRIME MINISTER, SAYING: ''Today we have signed deals worth more than 14 billion pounds, securing jobs and long-term economic growth for the British and the Chinese people.'' Hopes have been high for a massive round of Chinese trade agreements. BP has already set the stage with a new deal to supply China with liquefied natural gas. It's worth an estimated 20 billion dollars. Also in the mix: an agreement to make London a clearing centre for trading Chinese currency. Britain's high-speed rail could also, it's thought, tempt Chinese money. Despite the controversy which continues to dog the project. The UK's nuclear industry is also of interest. That's raised questions about whether Britain should do more to protect strategic industries. Commerzbank's Peter Dixon says another concern could be competing demands on China's cash. SOUNDBITE (English) PETER DIXON, STRATEGIST, COMMERZBANK, SAYING: ''They may decide that Britain is the flavour of the month today, and they may go elsewhere in the future. I think the question has to be what is the quid pro quo which the Chinese demand in return for investment. If they're looking for decent returns and stability, then the UK is the place for them. If they want special treatment in certain other areas of the geopolitical sphere, then maybe that's going to cause problems.'' But with huge cash reserves from selling exports to the world, others says it's natural China should invest in the rest of the world too - and its corporates. Philippe Gijsels is Chief Strategy Officer at BNP Paribas Fortis. SOUNDBITE (English) PHILIPPE GIJSELS, CHIEF STRATEGY OFFICER, BNP PARIBAS FORTIS, SAYING: ''Growth is still quite limited so that means that they're looking for growth. And I think that there you will see a lot of M&A not only in the pharmaceutical sector but also you see the GE-Alstom saga and I think in the second half of the year you will see many more of them. And basically China will become more and more contented in this market because they have the cash and they will look to buy some growth and some technology and also some resources clearly in the rest of the world.'' Good news - though not for all. These protesters saying its human rights record means China is still not a place Britain should be doing business with.

China visit boosts UK investment hopes

Tuesday, Jun 17, 2014 - 02:25

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